24 March 2013

The New Soviet Union: Cyprus Shows How The EU Destroys Democracy

Before
I can explain what this Cyprus crisis means to Ireland, I have to dust
off some Soviet-era vocabulary: nothing else will do.

First, nomenklatura. This was the name given to the self-propagating
Communist Party elite who controlled Soviet government, industry,
finance and most of the caviar.

Next, apparatchiks. These were the unquestioning loyal subordinates of a Communist apparat or administrative system.

As for other words from the USSR era – transnational, class
betrayal and colonialism – you already know those, so now I can get
started and explain what Ireland must learn from what the European Union
nomenklatura did to Cyprus and its president in the early hours of
March 16th.

Picture the scene. We can do that because three reporters from the
Wall Street Journal, one in Brussels, the others in Berlin and Nicosia,
have managed to piece together an hour by hour account of events leading
up to the announcement that eurozone finance ministers would force the
Cypriot government to confiscate €5.8bn from bank deposits.

What has happened since that night remain other issues: the rush to
Moscow by the Cypriot finance minister desperate for a loan, the
attempts by Cypriots to find a Plan B, the possibility of Cyprus leave
the euro.

But above all, there is what happened over the night of the 15th on
the sealed-off upper floors of the European Council building. It was
the best illustration yet of why a former senior European Commission
economist now refers to the EU as the New Soviet Union: the treatment of
the President of Cyprus that night showed just how the power over the
member states has shifted away from democratic control and into the
hands of the unelected elite of a transnational European empire. And
what happened to the Cypriot president that night could happen to any
Taoiseach.

Berlin propaganda

So, as I say, picture the scene. That night there were ten hours of
negotiations trying to put together a deal that would keep the banks in
Cyprus solvent. What the Cypriot banks needed was €17.5bn. But the
Germans were unwilling to allow such a bail-out. Already the Berlin
propaganda machine had been pumping out stories that the Cypriot banks
were stuffed with Russian hot money, and decent Germans were not going
to protect the deposits of Russian oligarchs.

Which was racial stereotyping by the Germans. There plenty of legit Russian businessmen in Europe.
A lot of such businessmen may have shifted their money into Cyprus to
get it away from banks controlled by Putin and Medvedev. Such
businessmen clearly thought that EU banking played straight. Now they
know different. But that is another story with other implications for
how investors from outside the EU will now regard the safety of eurozone
banks, including Irish banks.

It also has implications for anyone in the EU who thought that the EU
law forcing all member states to guarantee bank deposits up to €100,000
meant something.

This week some of us sat in the press room at the European Commission
and listened to Olli Rehn’s apparatchiks deny that confiscation of a
percentage of Cypriot bank deposits under 100k was in breach of this
legal guarantee. They insisted that this wasn’t confiscation, it was a
tax. Since taxes are the ‘competence’ of member states, it didn’t breach
the law.

The apparatchiks insisted that, anyway, this was a one-off because
the case of Cyprus was ‘special.’ By last Wednesday night however, news
had leaked out that the Spanish government now plans to ‘tax’ bank
deposits by up to 0.2 percent. You might say that’s not much. But
whether it is 0.2 percent or 20 percent doesn’t matter. The precedent of
raiding bank deposits with the Troika’s blessing has been set.

Cypriot president alone

Back to the move against Cyprus. It started on the Friday evening
when Jeroen Dijsselbloem, president of the eurogroup, called an
emergency meeting after the European summit. According to the Journal,
‘Just after 5 p.m., finance ministers, IMF Managing Director Christine
Lagarde, ECB executive board member Jorg Asmussen and the EU’s
economic-affairs commissioner, Olli Rehn, filed into a meeting room on
the fifth floor of the Justus Lipsius, which houses the EU’s ministerial
meetings and summits.’

Now, this is significant: ‘Cyprus’s newly elected President Nicos
Anastasiades stayed behind in the country’s delegation on the seventh
floor.’ The democratically-elected president was not allowed in the
room as the unelected Olli Rehn began with his plans for how to get
€5.8bn out of Cypriot bank depositors.

Mr Rehn wanted a straight ‘haircut’ on all deposits in all banks. But
then Christine Lagarde said they must gouge between 30 percent and 40
percent from all deposits over €100,000 in the two main Cypriot banks.

The
horrified Cypriot finance minister said this couldn’t happen. He began
the first of several scrambles upstairs to where President Anastasiades
was being kept in isolation. Of course he was. This is how an empire
treats uncooperative colonial natives. In the 19th century, Belgian
colonial gang-masters would lock Congolese wives alone in windowless
sheds until their husbands harvested the right amount of rubber.

In the end, as a representative of Mr Anastasiades told the German
newspaper Bild, ‘the Germans held a gun to our chest.’ It was at some
time after a meeting of the inner core of the nomenklatura which began
in another room at 1 a.m. that Mr Asmussen of the ECB pulled out the
gun. He told Mr Anastasiades that either he agreed to the deal on bank
deposits, or EU funds would be cut off to the country’s two main banks. Just to ramp up the 3 a.m. terror, Mr Asmussen then rang Mario
Draghi, president of the ECB, in front of Mr Anastasiades. The German
warned Mr Draghi that the ECB might have to deal with the collapse of
the Cypriot banks on Monday.

You know the rest. The eurogroup came out and announced that the
Cypriot president had agreed that there would be a levy on all bank
deposits.

Again, this is significant. The EU system of government operates by
keeping in place the institutions of the governments over which it has
taken power. The public had to be told that it was the president of
Cyprus himself who had decided to seize deposits.

Power out of view

Two British historians, Christopher Booker and Richard North,
identified this system in their history of the EU, The Great Deception:
‘It is central to the nature of the “project” that the parliaments,
officials and judiciaries of each of the member states should all be
left in place. But behind them [the project] erected a new supranational
power structure which worked through these national institutions,
controlling them and enlisting their active collaboration in a way that
remained largely out of view.’

If you go through the statements of Monnet and other founders of the
project as long ago as the 1920s, ‘the one thing above all the “project”
could never be, because by definition it had never been intended to be,
was in the remotest sense democratic. The whole purpose of a
supranational body is to stand above the wishes of individual nations
and peoples.

It would be supranational government by technocrats, ‘unsullied by
any need to resort to all the messy, unpredictable business of
elections.’

‘The only useful role left to the politicians in this process was to lend it a veneer of democratic legitimacy.’

Defiance

Which is why the nomenklatura were in such a fury when the Cypriot
parliament refused to cast a single vote in favour of the deal: the
members of parliament were not being ‘European.’ Indeed, in a top level
conference call among eurozone officials on Wednesday – notes from which
were leaked to Reuters – the Cypriot parliament’s democratic defiance
was denigrated as ‘emotional.’

In fact, the parliament’s defiance was magnificent. But I did not
cheer. I know that in the EU, a Yes vote is forever, but a No vote is
only ever temporary. The Troika apparatchiks immediately delivered the
message that the parliament must keep voting until they get the right
answer.

This technique is familiar to anyone who remembers the politics of
the USSR: vote all you want, but there is just one possible result.

I am not the only one to see that Soviet similarity. I go back to
that former senior commission economist I mentioned at the top. He is
Bernard Connolly. I have quoted before from the new edition of his book,
The Rotten Heart of Europe.

Mr Connolly was infamously forced out of his job in 1995 when he
wrote the book questioning the prospects of monetary union. From his
vantage point as one of the nomenklatura, Mr Connolly saw the truth of
the ambitions of this elite. They wanted ‘to complete the elimination of
sovereignty, law and political legitimacy in Europe, freeing elites – a
European nomenklatura – from any residual constraints either of
democratic control or law.’

To do this, they have persuaded the ‘useful idiots’ across the member
states to suppress the results of referenda and to topple
democratically-elected governments ‘in manoeuvres reminiscent of
Stalin’s tactics in Eastern Europe after the war.’

What Mr Connolly means, first, are the results of referenda not just
in Ireland, but in the Netherlands and France. In 2001, the
then-president of the European Commission, Romano Prodi, and other
members of the elite made a decision behind closed doors to draw up an
EU constitution. They promised that it would not come into effect unless
it had the unanimous consent of all member states.

Fifty ways to win

Within a single week in 2005, both the French and the Dutch voters
rejected the constitution. Here is how Nigel Farage, MEP and leader of
the UK Independence Party, recalled the moment in a recent interview in
the Financial Times: He was drinking champagne in the Brussels press bar
to celebrate the Dutch rejecting the EU constitution in a referendum
when a German MEP came by and said, ‘You may have your little
celebration tonight but we have 50 different ways to win.’

Indeed they have. By 2007 they had produced the Lisbon Treaty, which
was the constitution in everything but the title on the front page. You
know the rest: in 2008 the Irish people rejected the treaty. The
nomenklatura rejected the democratic result.

In 2011 the nomenklatura pulled off two Soviet-style coups. They toppled the elected governments of both Greece and Italy. It was Hungary 1956 without the tanks.

That year George Papandreou, then prime minister of Greece,
announced he would hold a referendum on the further austerity demanded
by the Troika. But the nomenklatura would not allow a democratic vote.
They demanded Mr Papandreou abandon the referendum. The humiliated prime
minister was forced to resign.

The Troika then manoeuvred in one of the nomenklatura, Lucas Papademos, former vice-president of the ECB, as prime minister.

The EU elite also toppled the government of Silvio Berlusconi.
Following a secret telephone call – later leaked to the Press –
Chancellor Merkel told President Giorgio Napolitano of Italy she was
worried that Prime Minister Berlusconi wasn’t strong enough to deliver
the kind of reforms in Italy that ‘Europe’ wanted. The old Communist
Napolitano got the message. He destabilised the prime minister at home,
while the ECB got busy rocking the market in Italian bonds. Mr
Berlusconi was forced out of office, and President Napolitano parachuted
in the unelected choice of the nomenklatura, again one of their own,
former European Commissioner Mario Monti.

Would topple Ireland too

If you think the nomenklatura has not been willing to topple an
Irish Government, remember the pressure Jean-Claude Trichet, then
president of the ECB, put on Finance Minister Brian Lenihan to force him
to accept a bailout against the wishes of the Irish people. The
pressure was of course applied in secret, we learned about it only from
letters and notes of telephone calls released last year.

Mr Trichet pushed Mr Lenihan to accept the terms being offered by
the Troika, threatening that the ECB would otherwise cut all emergency
funding: that would have toppled the Government.

The finance minister resisted. But he was finally pushed into the
deadly deal after Patrick Honohan, governor of the Irish Central Bank,
said publicly a bail-out was necessary. That statement finished Mr
Lenihan.

What is important to note is the Dr Honohan, though always referred
to in Ireland the governor of our central bank, is something else in the
EU. He is a member of the Governing Council of the ECB: that makes him a
member of the European nomenklatura.

It is now clear the nomenklatura intend they should be without any
constraints of democratic control. Mr Connolly notes that they have
transferred powers to ‘unelected, unaccountable and explicitly
anti-democratic bodies.’ These include the eurogroup, the ECB, the
bail-out funds, in particular the new European Stability Mechanism,
‘which, astonishingly, has complete legal immunity for itself and its
officers.’

He notes the undemocratic powers of the IMF and the G20.
Then there are the banking and supervisory bodies, and the economic
government of the euro area which is meant to ensure economic
‘discipline.'

Humiliation

This ‘discipline’ is why the democratically-elected members of our
Dail must suffer the humiliation of knowing that a German parliamentary
committee now sees our Budget before they do: the committee, free from
Irish democratic control, acts for the nomenklatura.

On their trips to Brussels, the Taoiseach and Finance Minister pose
as part of this ruling elite. If they were to put Ireland first it
would be a class betrayal of their colleagues in the nomenklatura. Alas
the Irish people are so submissive that they allow this evil idiocy by
our Government.

But the Mediterranean peoples are not submissive. Judging by the mood of the peoples of Cyprus,
Greece and Italy in particular, they have had all the pain they can
take. The crowds are already on the streets in their thousands. Now all
they need are leaders.

Which is why Cyprus gives me hope. Like that old Soviet villain Lenin, I know that worse is better.

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A note from SoRo:

Worse is not always better. Lenin was not better than the Czars and Stalin was not better than Lenin, but collapse very well be better than a new EUSSR.

Interestingly, in the Soviet-like EU with its 27 unelected,
unaccountable apparatchiks, the death penalty was reintroduced in a footnote to
the Treaty of Lisboa, upon neither the whole nor part of which the overwhelming
majority of Europeans were allowed to vote. In its “explanations” and
“negative definitions” accompanying the fundamental rights, the Charter of
Fundamental Rights of the European Union allows a reintroduction of the death
penalty in case of war or imminent war, but also the killing of humans to
suppress insurgency or riot. Strangely, the European Soviet can kill you if you riot against or attempt to
overthrow it regardless of how justified either are, but kill nearly 100
people as in the case of Anders Behring Breivik? "Oh, no. We're Europe. We are so civilised. We can't kill mass murderers. We have evolved...unlike those Neanderthal
Americans. Would you care for some Pouilly-Fuissé and Brie de Meaux?"